2026 on the Horizon: Key Employment Law Updates for New York Employers

As New York moves into 2026, employers will need to prepare for several important employment law changes that affect wages, exempt status, leave rights, hiring practices, and retirement plan requirements. Understanding these changes now will help HR teams and business owners avoid compliance gaps and costly mistakes. This article breaks down the key developments taking effect in 2026, explains what they mean in practical terms, and outlines what employers should do to get ready.

If your organization operates in New York, now is the time to review payroll practices, leave policies, hiring procedures, and employment agreements ahead of 2026. For practical guidance on navigating New York’s evolving employment law requirements, please contact the ILS legal team at contact@consultils.com.

Minimum Wage and Overtime Exemption Thresholds

1. New York Minimum Wage Increase (Effective January 1, 2026)

New minimum hourly rates：

• $17.00/hour — New York City, Long Island, and Westchester

• $16.00/hour — Rest of New York State

  
  

Who is affected:

• All hourly and non-exempt employees

Employer action：

• Ensure employees are paid at least the applicable minimum wage for all hours worked

2. Increase in Exempt Salary Thresholds (Overtime Exemption)

Exemption requirements, employers must satisfy both:

• The duties test, and

• The minimum salary threshold

  
  

New weekly salary thresholds (effective 2026):

• $1,275 per week (≈ $66,300 annually) — NYC, Long Island, and Westchester

• $1,199.10 per week (≈ $62,353.20 annually) — Rest of New York State

Who is impacted:

• Employees classified as executive or administrative exempt

  
  

3. What Employers Should Do?

• Review all exempt employees to ensure they meet both the job duties and new salary tests.

• If not, either increase their salary or reclassify them as non‑exempt and pay overtime appropriately.

• Also, ensure all non-exempted employees are paid the increased minimum wage and entitled overtime.

Paid Family Leave Benefit Changes

New York’s Paid Family Leave (NY PFL) program continues to provide eligible employees with up to 12 weeks of protected leave for bonding with a new child, caring for a seriously ill family member, or certain military family circumstances. The program is funded through employee payroll contributions.

In 2026, the maximum weekly benefit will increase to $1,228.53, and the maximum employee contribution for the year will rise to $411.91.

Employers must update payroll systems to apply the new contribution rate and should prepare to answer employee questions about the benefit amounts.

Expanded NYC Safe and Sick Time Requirements

New York City employers should be prepared for significant changes to leave requirements under the Earned Safe and Sick Time Act (ESSTA) effective February 22, 2026. Here are the key provisions of ESSTA:

• Employers must now provide 32 hours of unpaid safe and sick leave per year, available immediately on the first day of employment and refreshed at the start of each calendar year.

• This unpaid leave is in addition to existing requirements for paid safe and sick time (40 or 56 hours, depending on employer size) and 20 hours of paid prenatal leave. Employers must track each type of leave separately.

• The list of reasons employees can use both paid and unpaid safe and sick time has also expanded to include caregiving, certain legal proceedings (such as those involving subsistence or housing benefits), workplace violence, public disasters, and childcare disruptions.

What Employers Should Do?

• Update leave policies and tracking systems：reflect the new unpaid leave bank, expanded qualifying reasons, and documentation requirements.

• Train HR staff and supervisors： make sure the employers understand how the new leave integrates with existing policies.

Disparate Impact Discrimination

New York State has made it clear that employers may be liable for “disparate impact” discrimination, meaning that a neutral policy or practice that disproportionately affects a protected group can be unlawful even without discriminatory intent. To defend against such claims, employers must show the policy is job‑related, necessary for business operations, and there is no less discriminatory alternative.

What Employers Should Do?

• Review key workplace policies：Examine hiring criteria, performance evaluations, attendance rules, and scheduling practices for potential compliance or equity concerns.

• Identify and address disproportionate impact：Assess whether any policies may disproportionately affect certain groups and revise them unless there is a clear and well-documented business justification.

Restrictions on Credit History and Training Repayment Agreements

A new statewide law will generally prohibit employers from requesting or considering an applicant’s or employee’s credit history when making hiring, promotion, or compensation decisions, with limited exceptions for roles where credit checks are legally required. The ban will take effect April 18, 2026 for most employers.

Separately, New York’s “Trapped at Work Act” prohibits most training repayment agreements that require employees to reimburse training‑related expenses if they leave employment before a specified term. This ban is currently in effect and will continue into 2026. Employers should review and remove or revise any such provisions in offer letters, employment agreements, and onboarding materials.

What employers should do？

• Update hiring and background check procedures to eliminate credit history inquiries where prohibited.

• Remove prohibited repayment clauses from employment agreements and confirm current documents comply with the new law.

New York Secure Choice Savings Program Deadlines

Employers with 10 or more employees that do not offer a qualified retirement plan will be required to register and facilitate the New York State Secure Choice Savings Program beginning in March 2026. The program requires employers to automatically enroll eligible employees in a state‑sponsored Roth IRA and remit payroll deductions unless the employee opts out.

Deadlines to begin facilitating the program vary by employer size:

• 30 or more employees: March 18, 2026

• 15–29 employees: May 15, 2026

• 10–14 employees: July 15, 2026

Employers are not required to contribute to these accounts or assume fiduciary responsibility. They just need to facilitate the wage deductions for this purpose. 

What employers should do？

• Determine if your business is covered, register by the applicable deadline, work with payroll to implement deductions, and distribute opt‑out information to employees.

Impact on Employers

Collectively, these 2026 changes will require employers to update payroll systems, revise employee handbooks and policies, redesign leave tracking, and train HR and management on new compliance obligations. Overlapping state and city rules, particularly in New York City, increase complexity.

Begin preparing now:

• Update pay rates and exempt classifications for 2026 wage laws.

• Revise leave policies and tracking systems to incorporate unpaid safe and sick time and expanded qualifying reasons.

• Train HR and managers on all new leave and hiring limitations.

• Remove prohibited credit checks and training repayment provisions from HR documents.

• Register for Secure Choice Savings by the deadlines that apply to your business.

• Consult employment counsel to ensure full compliance with overlapping laws.

Taking these steps early can help employers avoid enforcement actions, legal claims, and operational disruption as the new year unfolds.

If your organization operates in New York, now is the time to review payroll practices, leave policies, hiring procedures, and employment agreements ahead of 2026. For practical guidance on navigating New York’s evolving employment law requirements, please contact the ILS legal team at contact@consultils.com.

Disclaimer：This article is based on the latest policy information as of December 15 2025. Given the rapid changes in immigration policies, it is advisable for enterprises to pay close attention to official updates and consult professional immigration lawyers for the latest guidance. Our firm will continue to track policy developments and provide clients with timely and accurate professional services.

As Managing Partner at ILS, Richard Liu ranks among the leading U.S. attorneys in corporate, employment, and regulatory law. He is known for crafting legal strategies aligned with clients’ business objectives and advising Fortune 500 companies, startups, and executives on corporate transactions, financing, privacy, and employment matters across the technology, healthcare, and financial sectors.

Before founding ILS, Richard practiced at top defense firms, where he developed a reputation for anticipating risks and designing strategies that balance protection with growth. He has secured favorable outcomes in contract and intellectual property disputes, represented clients in state and federal courts, and is recognized for combining large-firm expertise with boutique-firm agility. Richard is also a frequent speaker at industry and legal conferences.

Email: contact@consultils.com | Phone: 626-344-8949

Ellen focuses on commercial litigation, employment disputes, and regulatory compliance, advising U.S. companies and China-based enterprises with U.S. operations on navigating complex legal and regulatory challenges. She represents clients in federal and state courts as well as private arbitration, with experience across the technology, finance, manufacturing, and retail sectors.

Drawing on her background at a Magic Circle firm and a Vault Top 10 U.S. law firm, Ellen brings a combined transactional and litigation perspective to her practice. She approaches disputes with a focus on efficiency, precision, and practical results, delivering strategies that protect her clients’ interests and support their business objectives.

Email:  contact@consultils.com | Phone: 626-344-8949